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FIRE Parents: Can You Raise Kids AND Retire?
Updated: February 26, 2021 |
Taylor Kovar, CFP

Is It Possible to Retire While Raising Kids?

Fire parents: We want our children to have every happiness we’ve been able to enjoy and to avoid all the hardships we ever endured. For generations past, the only way to make this happen was for moms and dads to work long hours, squirreling money away to leave to their kids. Hard work was the legacy and a small sum of money was the gift.

Things are much different for people who seek early financial independence. In addition to generating lasting wealth, you want to show your family how hard work can lead to fun and freedom in the present. You have the opportunity to focus not just on the estate you leave behind, but also on the shared moments that you and your kids can cherish forever. 

Some think the idea of a family of four with no active income sounds too good to be true. If you don’t already have kids, you’ll quickly learn that the little rascals aren’t all that cheap. Food and medicine and diapers and classes and toys burn through your 4% spending limit at an accelerated rate. While I don’t believe finances alone should discourage anyone from starting a family, money can’t be ignored if your goal is financial independence.


So, can you raise kids and retire young? Yes, you absolutely can. If you want the process to go smoothly, the prep work needs to start now. 

FIRE= An acronym for “financial independence, retire early.” Read more about the FIRE Movement HERE.

How Much Does a Kid Cost?

Unlike a car or a house, you don’t get to put a price tag on a child. Instead, you cover them in thousands of price stickers – some big, some small, all significant. To list a few of the recurring charges parents can expect:

  • Clothing
  • School
  • Summer camps
  • Childcare
  • Healthcare
  • Playdates
  • Christmas gifts
  • Ice cream 
  • Pets
  • Hobbies


These bullets make up a fraction of the expenses children bring about, while leaving off the big-ticket items like cars and college tuition. You get to decide if you want to raise your child in a frugal or lavish way, but you’re going to have to spend a bunch in either scenario.

For the FIRE lifestyle to work, we need to get pretty specific in our calculations. That might be the biggest hurdle with child-rearing and early retirement – predicting your spending becomes much more difficult. You have to leave lots of wiggle room so that a chipped tooth or a trip to the Little League World Series doesn’t throw your balance sheet out of whack.

At the very least, you need some sort of average to start with. The numbers vary pretty wildly, but I’ve looked at a handful of studies and put the low-end average around $250,000. That’s the bill you foot from birth until your son or daughter turns 18 and never needs financial help again (LOL). This is definitely a generous estimate. If you plan on sending kids to private schools and eating only the finest organic foods for every meal, I’m sure you could quadruple the number without any trouble. 


While you’ll have a little control over certain costs, a lot of bills give you no choice.

Healthcare premiums often jump up, plus all the co-pays for the regular visits with pediatricians. Preschool is never as affordable as you want it to be, travel costs more even with a baby that flies for free, and a run-of-the-mill daycare service still adds up to a hefty bill come the end of the year.

As always, location determines your ability to retire early and maintain a certain lifestyle, and this truth gets magnified when kids arrive on the scene. A majority of early retirees come from metropolitan areas like New York and San Francisco where high-paying jobs in tech and finance make it easier to save money in a hurry. However, an exorbitant cost of living is a byproduct of those big-city industries, making every bite of food and trip to the movie theater 5x more expensive than in other parts of the country.

While a long list of expenses might look overwhelming, all this info shouldn’t be discouraging. The FatFIRE movement absolutely leaves room for childrearing, and ducking out of the traditional workday could put you in the perfect position to parent with style and grace. The key is long-term preparation and planning.

In order to really dive into the prep work, you have to consider what type of upbringing you intend to provide.

More focused on scholastics or hobbies? Full of travel or living on a ranch and learning how to tend the land? The FIRE movement prioritizes your passions and freedom over the longevity of your career; how can you adapt your interests to meet the needs of a young child or, harder still, a teenager?

People who love the math side of finance will have a field day putting together spreadsheets and algorithms to figure out how many millions go into 18 years with two kids, and how little tweaks in spending can change the equation. I don’t quite have the bandwidth for all that, but I will say it’s easy for me to imagine a $5 million difference in savings for a family with kids versus a FIRE couple without.

If you’ve made enough money to consider retiring in your 30s or 40s, I trust that you can create your own model and figure out the math. The real riddle is how you’ll make having a child fit with your perception of retirement. What will your routine look like in 10 years? What percentage of your time will be your time? Any of these questions might have an easy answer, but you’ll find yourself up the creek without a paddle if you don’t think about them ahead of time.  

Finding Balance in Your Freedom

That’s the compromise we parents make when we decide to bring new lives into the world. A child is an incredible blessing, but that blessing still does a real number on our free time. 

I encourage FIRE parents to make one big promise when balancing their retirement expenses and financing a child’s upbringing: stay selfless. The moment you get upset about your kids’ needs throwing off your plans, you’ve lost sight of the big picture and what’s most important. I don’t view the FIRE movement as a way to shirk responsibility, and I want everyone to see the difference in leaving work because you’re rich and stepping away from the workplace because you’re wealthy. The first option lets you burn through money, while the second path is for people who want to make the world a better place.


“Teaching our kids how to be good people is one of the best ways for us to leave our mark on the world. If you let that become a focus of your retired lifestyle, you’re already on the right track.”


Being selfless doesn’t mean doting on your child every second of the day. In fact, a lot of FIRE parents have the opposite problem of the traditional working mom or dad. Instead of cursing the 40-hour workweek and the commute for eating into that precious family time, an early retiree has to figure out how to get everyone the right amount of independence. Your time becomes harder to claim when you’re within earshot of a kid that’s hungry or bored. It becomes kind of difficult not to accidentally spoil your children.

Homeschooling parents have a big decision to make with regard to time management.

This type of education works wonders for some families, but it also removes the built-in social structure of the regular classroom. This means you not only have to put some extra effort into scheduling playdates, but you might also end up pouring lots of cash into aikido lessons and dance classes to keep your child active. 

If your FIRE plans involve travel, you have to work really hard to introduce both work and play while you move around. Living abroad for a year to learn a new language and have once-in-a-lifetime experiences can teach invaluable lessons. At the same time, childhood shouldn’t be an endless vacation. There are two issues I’ve seen pop up as a result of a flighty youth: 1) instability in the daily schedule leads to a lack of responsibility, and 2) parents spend too much of the trip trying to make the kids enjoy it. Keep these potential problems in mind so you can do your best to avoid them.

Life is a long exercise in navigating short-term wants and long-term needs. Fortunately, no one understands that better than a member of the FIRE movement. The same principles that kept your face to the grindstone in order to retire early should come in handy when you’re figuring out how to live your best life while setting your children up for future success. 

The Future Beyond Your Own

After you’ve sorted out the spending details that influence where you live, what kind of school your child attends, and how much time you spend jet-setting around the globe, it’s time to answer the big questions that are lying in wait. 

Some parents want to save every nickel until their dying day. If you don’t give your children any of your wealth until they inherit all of it, you won’t have to be there to see if they squander it. This is definitely an option; it cuts down on the planning you’ll have to do, and it means your children have to fend for themselves a little more on the way to adulthood. 

To me, this kind of hoarding doesn’t sound like the best use of wealth. I’m all for thinking about estate and legacy planning, but I still have a few decades to really enjoy my life and the time I get to spend with my kids. As long as I don’t throw money at them frivolously, I think the wealth I’ve earned can help us all live our happiest lives.

You need to decide the best way to finance your child’s future. There are a lot of potential answers, so I’ll give a brief mention to the most common. 

529 Plan

Paying your child’s tuition isn’t just a gift, it’s a preventative measure to keep them from falling into the student debt crisis that’s consumed so many people. If you feel sure you’re raising a future college grad, starting a 529 plan as early as possible can help everyone save money. The tax advantages are tremendously appealing with a 529, giving you a little extra incentive to fund the account. 

Unfortunately, if your child opts out of higher education, all those advantages get washed down the drain. You have to be pretty confident that college – or some type of qualified education – is in the cards before you start funding this account.

Custodial Account

This is an alternative to the 529 with a few tax advantages and a lot more flexibility. The big restriction on a custodial account is that any asset deposited can’t be withdrawn for use by the parent. Fortunately, that won’t be an issue since you’ve got your own retirement funds and you’re excellent with money management. I just want you to be aware that what goes in can’t come right back out.

If you don’t have a plan and just want to make sure something is set aside for your child once he or she reaches adulthood, this is a solid option. Might not be the world’s greatest moneymaker, but it’s a solid way to save.


In the right situation, a house can turn everyone into a winner. Real estate is always a good investment, and while it requires upkeep and annual payments, a house for your child to either live in or sell down the road could very well appreciate more than another investment. There would be a lot of questions to answer about renting, summer usage, and how and when the house gets transferred. Even with all these things to wonder about, there’s never a bad time to own a good property. 

Brokerage Account

If you already invest in the stock market and have even a baseline knowledge of how it works, I think this is a great way to put money aside for your kids. Buy a few shares of your favorite companies and then use the account as a teaching tool as your kid gets older. You can talk about dividends and give little lessons about economic growth without boring anyone to tears. If you buy shares in familiar brands, you give the kids a little extra incentive to care about the account. 

If part of your objective is to get your child interested in finance and investing, a brokerage account will go a lot farther than a custodial account or a CD. It comes with a little volatility, but a sound strategy should deliver steady growth as your little one barrels toward adulthood. 

Seed Money

This is like a college fund with a twist. Whereas everyone’s plan 20 years ago was to earn a degree and start a career, more and more people are bypassing the cap-and-gown part. You don’t have to look too far to find a massive company run by a college dropout, and that’s because good ideas don’t require a bachelor’s or a master’s degree.

If you save money for a business your son or daughter might one day start, either through a brokerage account, a high-yield savings account, or even a Roth IRA, you maintain flexibility while waiting to see what your child plans to do with their life. Should they land a dream job with a great salary and no need for their own investment, the money can go to something else. If it turns out they desperately want to go to a four-year school, you can use the funds for tuition. 

Best of all, even if they don’t choose to start a company, just having the opportunity to do so can help a child dream big as they start making plans for their future. We want our children to believe they can accomplish great things, and a little financial encouragement goes a long way. You’ll have to make sure those big dreams stay somewhat realistic to avoid squandering all the savings, but taking a chance on your child seems like the right type of risk. 

What’s Your Goal?

We get so caught up in work and earnings and retirement that we can easily lose sight of what it’s all for. The word “retirement” has an almost universally positive connotation, while “work” often gets the opposite reaction. You have to look past the terminology to figure out why you want the FIRE life, and then consider how that jives with what you want for your children.

Why did you put in all those 60-hour work weeks? Yes, it was to make a lot of money and take control of your life, but what do you intend to do with that control? Perhaps more importantly, what will your life look like a decade down the road, and how will you feel about the choices that got you there? We can’t predict the future, but we can and should think about it while we try our best to enjoy the present.

Money can be lost and regained, but time just keeps on flying. If you want to start a family but you’re worried about how to make it work with early retirement, you just need to alter your plans a little. As long as you’re willing to make small sacrifices here and there, I guarantee it’s possible to do both. 


Taylor & Megan Kovar

The Money Couple

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